OCR A2 Law - The Law of Contract - Frustration (4)

The Limitations on the Doctrine of Frustration: Frustration provides justice, especially as supervening events are beyond the parties control, however the doctrine has limitations.

Limitation 1 - Leases: The Common Law states a lease can never be frustrated as the subject matter is a term of years. CASE: "National Carriers v Panalpina". In this case, there was a 10 year lease, and due to road works the warehouse wasn't accessible for 18 months. HELD: No frustration as the Lords said Obiter that a lease can only be frustrated due to an event of nature.

Limitation 2 - Self-Induced Frustration: The Common Law states if a party has played a part in the frustrating event, no frustration occurs. CASE: "Martime Fishing Co v Ocean Trawlers". In this case a chartered ship required a licence for fishing, the claimant asked for 5 licences but was only given 3. He chose to use the 3 licences on other ships. HELD: Not frustrated as he could use the licences on the other ships if wanted to.

Limitation 3 - Foreseeable Risk: The Common Law states is the event claimed as frustrating was in contemplation of the parties at the time of the contract, then the plea of frustration is rejected. CASE: "Amalgamated Investment v John Walker". In this case the defendant contracted to sell a building to the company who wanted to redevelop it. The building got listed which saw a decrease of the contract price. HELD: No frustration as listing a building was a risk associated with old buildings which developers should have been aware of.